The Woodlands, TX commercial litigation attorney Steven C. Earl discusses arbitration. He states that arbitration is a private forum that serves as an alternative to the judicial system. Instead of presenting a dispute before an elected or appointed judge, parties submit their case to a tribunal, which may consist of either one or three arbitrators and is typically governed by the rules of a designated arbitration association. For instance, a dispute might be handled under the American Arbitration Association’s commercial or construction rules. The number of arbitrators is determined by the parties’ agreement, and the arbitrator’s decision is almost entirely final, with very limited grounds for challenge.

He notes that while some arbitration forums allow for an internal appeal from a single arbitrator to a panel, these processes do not provide the same appellate rights available in a courtroom. In a traditional court, a losing party can appeal to a higher court, such as a court of appeals. In arbitration, such options are often unavailable, making the arbitrator’s decision effectively conclusive.